June 2014
2014 (34) STR 16 (Bom.) Kandra Rameshbabu Naidu vs. Superintendent (AE) ST, Mumbai-II
By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 2 mins
fiogf49gjkf0d
For arrest of the assessee for non-deposit of service tax collected exceeding Rs.50 lakh as per amendment to section 89 (1)(d) (ii) w.e.f from 10-05-2013, whether service tax collected till the date of amendment is to be considered OR tax collected from the date of amendment is to be considered?
Facts:
Appellant (Director of two companies) was collecting service tax from its customers and collected Rs. 2.59 crore during the period 2010-11 to 2013-14 but did not deposit it except Rs.15 lakh. Appellant though registered under service tax law, never filed its service tax returns. Appellant was arrested under amended section 89(1)(d)(ii) as the service tax collected amount was exceeding Rs.50 lakh. Appellant filed Criminal Bail application before the Bombay High Court for obtaining bail and pleaded that the amendment in penal provision was not retrospective in nature and the service tax collection from the date of amendment till the initiation of investigation was less than Rs. 50 lakh and therefore section 89(1)(d) (ii) was not applicable to the case.
Held:
High Court observed that non-deposit of service tax collected from customers was a continuing offence and service tax collected till date of amendment exceeded Rs.50 lakh and therefore total arrears accrued as on date of amendment was exceeding Rs. 50 lakh and the investigation was not completed. Court dismissed the Bail application.
